Defensible Decisions: How to Prepare for 2026 Compliance Reporting Deadlines

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Scott Kelly: Hello, everyone, and welcome to Defensible Decisions. I’m Scott Kelly, an employment lawyer at Ogletree Deakins. And for the last 25 years, I’ve helped employers design and defend fair, effective workforce systems across hiring, pay, promotion, retention, and now artificial intelligence systems using legal insights, analytics, and audit-ready documentation.
Each episode is going to blend employment law developments with rigorous workforce analytics, so your decisions are defensible, compliant, and effective. We translate evolving enforcement priorities and regulations into practical steps you can apply before the lawsuit or the investigation arrives. You’re going to hear from attorneys, other experts such as data scientists, labor economists, social scientists, and hopefully some governmental officials. Together, we’ll cover recruiting and selection, pay equity, systemic discrimination, DEI compliance post students for fair admissions, artificial intelligence bias and audits, and federal contracting and reporting.
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Welcome back to Defensible Decisions. I’m Scott Kelly, a shareholder at Ogletree Deakins in our Birmingham and Washington, D.C. offices. Today, we’re unpacking the expanding universe of workforce reporting, what’s federally required, how states are layering on new obligations, and what employers should be doing now to prepare for 2026 and beyond. I’m joined by two terrific colleagues today, Kiosha Dickey, who’s of counsel in our Columbia, South Carolina office, and Jay Patton, a shareholder in our Birmingham office. Kiosha, Jay, thanks for being here today.

Kiosha Dickey: Thanks so much, Scott. Looking forward to our conversation.

Jay Patton: Great to be here, Scott. This is a timely topic.

Scott Kelly: All right. Well, let’s start with the federal anchors. Employers often focus on the EEO-1 component report, and for federal contractors, the Veterans 4212. Kiosha, what’s the current posture for 2026?

Kiosha Dickey: So, at the federal level, the EEO-1 component one remains a core requirement for private employers with at least 100 employees, and for certain federal contractors with at least 50 employees who might meet the contract thresholds. The report is a demographic snapshot by job category, race or ethnicity, and sex. The EEOC sets the filing window annually. The 2026 dates haven’t been announced yet, but in 2025, the site opened on May 20th with an expedited filing deadline of June 24th. So, based on what took place in 2025, employers need to be prepared to process data in the filing platform quickly. The filing site closed promptly on June 24th at 11:00 PM, even if employers were in the middle of entering data or uploading data files. And there was no recourse provided for employers who were not able to file.

Scott Kelly: All right. So, sounds like they need to be prepared to act fast. I also have heard some concerns that the EEOC may be following the playbook in the Heritage Foundation’s Project 2025, which calls for the elimination of the EEO-1 report altogether. To me, the question is whether that will happen before the collection in 2026 or after. I guess we can probably dive into that on another episode, that could be a whole episode of Defensible Decisions in and of itself. But Kiosha, should we just turn now to the VETS-4212? And thankfully for our employers that are listening, doesn’t that reporting run on a bit more of a predictable schedule?

Kiosha Dickey: Yes. The VETS-4212 reporting schedule is something that has not changed, at least since I’ve been doing this for over 10 years now. So, for federal contractors and subcontractors with a single contract or subcontract of $200,000 or more, VETS-4212 reports are due annually, during the August 1st to September 30th window. I want to point out that $200,000 threshold is an increase from the prior threshold of $150,000. The VETS-4212 reports report protected veteran employment and hiring by job category and location. The stability of that window helps employers with planning, but please note that the data still has to reconcile with internal systems, so advanced preparation matters.

Scott Kelly: All right. Jay, anything you want to add on federal coordination?

Jay Patton: Yes, Scott. At least two points that I think people—we should really focus on. First, we want to make sure the data sources that we’re using to populate the EEO-1 and the VETS-4212 reports, that those match the organizational structure, including establishment codes, establishment names, if there’s consistency. So, when that data is taken from the HRS system or other systems storing it, that’ll be properly translated into the reports. As well as the headcounts, how those are done for each report. They can vary slightly, and those need to be taken into account. The job category mapping is a critical area that needs to really be looked at and to the extent possible, standardized across reports, especially with the EEO-1 and VETS-4212, since they’re both operating off these EEO-1 categories, and they’re the same.

And the other thing to think about is to work with HR and payroll to make sure that the effective dates of the reports and the snapshot periods for the reports are consistent. That if HR dictates a snapshot date, that payroll complies with that, and so the data matches. Otherwise, we could have inconsistent reports. And that’s really the critical thing in all of these points is we want within the rules for the reports to match and not suggest any inconsistencies.

Scott Kelly: All right. Well, plenty to think about on the federal perspective. Let’s turn our attention to the states, that’s where some complexity really can start creeping in. Jay, mind giving us a quick tour, what’s in store for employers in 2026?

Jay Patton: Sure. In the state pay reporting, there’s quite a bit going on. In California, we have the longest standing pay reporting system, and it’s really the most intricate as far as the data side. The California reports for 2025 are due May 13, 2026. That includes both the payroll employee reports and the labor contractor employee reports. Both have thresholds that need to be looked at, but California sets the thresholds pretty low. So, if an employer has much contact with California, it’s very likely that they’ll need to file one or both of these reports.

Then Illinois. Illinois is more of a newcomer than California, but it has a pretty intense pay reporting obligation. It’s actually called…you have to receive an Equal Pay Registration Certificate, and that obligation comes every two years. But to receive that certificate, you have to do two things: (1) you have to provide data to Illinois, a little less intense in California but a decent amount of data, and (2) you have to do a certification that you comply with certain statutes and that your pay was in certain parameters. And that requires, it’s not a pure data exercise like California, it’s a little more involved. And in most cases, it’s probably going to require you to do some analysis.

So, that’s Illinois. And the general threshold is you have to have at least 100 Illinois employees to be required to do that. And then there’s also obligations discussing that you have to acknowledge reporting within the three years of establishment of your company, and then the follow on is every two years. And Illinois has been active in putting penalties on employers who do not file on time or do not renew their certifications in a timely fashion, with the fines of up to $10,000. So, it’s important to note that.

And the other thing about Illinois is they have the annual certification requirement through the Secretary of State, which requires submission of EEO-1 data to Illinois. So, that is another requirement that Illinois employers or employers who register in Illinois have to contend with and consider as well.

The most recent active pay reporting is in Massachusetts, and Massachusetts pay reports require the upload of the most recently filed EEO-1 reports for all Massachusetts establishments for employers who are covered by that reporting. An employer is required to do this in Massachusetts if they had 100 or more employees at any time in the state of Massachusetts in the prior calendar year. So, for the filings that are due February 2nd, next Monday, those filings would need to be filed if an employer had 100 or more at any point in Massachusetts in calendar year 2025.

So, those are the three ongoing state pay reporting statutes that are active. But just to make things fun, New York City is in the game now. And they have established a pay reporting regime for employers with 200 or more employees. We don’t have a lot of detail on how we count those employees, but the basic idea is, if you have 200 or more employees in New York City, you have to complete this obligation. It appears the obligation will be similar to the EEO-1 component two form that was basically an EEO-1 form with some additional pay data added on the backside of it, that the New York City obligation will be similar to that. It has a pretty long implementation phase. It’s going to be phased in over multiple years, but you can begin planning now to deal with that.

Scott Kelly: Sounds like a lot of burdens for multistate employers, Kiosha. What kind of pitfalls do you see impacting them the most?

Kiosha Dickey: Well, Scott, I would say in the areas of coverage determinations and timing, so thresholds can vary by jurisdiction. You may have nationwide headcounts versus in-state headcounts to consider. Then you also may have to consider whether labor contractor workers are in the count. Then you have different filing windows. You have different data elements that you need to collect and jurisdiction specific definitions. That means that you cannot rely on a single federal data set to populate those state filings. It also means you need a calendar that accounts for state specific deadlines and leaves time for data validation.

Scott Kelly: Okay. So, it sounds like we’re dealing with a message of basically plan early, align your teams, and don’t assume that there’s a catch-all for federal data, and that’s going to be able to…or better said, I guess, is that an approach on your federal data reporting isn’t going to cover all the issues that you might encounter on the state requirements.

Kiosha Dickey: Right, and that’s where, like you mentioned, aligning teams is so critical. Your legal, your HR team, your payroll, your talent acquisition, and any third-party vendors that you have, there needs to be cross-team coordination. That is essential so that your definitions, your classifications, your snapshots match that jurisdiction’s rules.

Scott Kelly: It seems like there’s some changes going on in California, in particular, that move beyond what we’ve seen for the traditional demographic reporting. Jay, do you have any insights that you can preview from California for the reporting cycles, or help clear up the confusion there?

Jay Patton: Yeah, glad to, Scott. First thing, the California reports for both payroll employees and labor contractor employees are due May 13th, 2026, provided you meet those threshold filing requirements. And I said before, basically the general guide is, if you have 100 or more payroll employees anywhere in the US with at least one in California, you’re required to file the California payroll employee report. Similarly, if you have 100 or more labor contractor employees anywhere in the US, with at least one active in California, you’re required to file the labor contractor employee report as well. Some employers may only file one, some may file both, but they need to be looked at independently.

And so, going to your real question, Scott, the Civil Rights Department has released preliminary templates and FAQs for the 2025 filings. And these years are funky because we’re collecting the 2025 California pay reports in early ’26 or mid-2026, but they’ve released preliminary templates for that reporting, and those show some changes. And so, I want to talk about those changes a little bit. And basically, the FAQs that were put out, the preliminary FAQs and the preliminary data templates, which is the thing you would upload with data, and that’s really the real rules of the road. This is what you’ve actually got to go to California. They show three new columns: (1) exemption status, (2) employment type, and (3) total annual weeks worked. At this point in the preliminary documentation, these columns were presented as optional. And we have seen some movement towards final templates with stuff being posted and then removed. And to the extent we know or can predict, it appears these will remain optional for this filing period, but it seems very likely that they will become mandatory down the road.

But the real question or the real take home here is, this is going to be much more granular information. California through CRD is going to be looking deeper and more deeply into your workforce and connections. And so, I think that’s really what we should maybe shift to, to look at.

Scott Kelly: All right. Well, Kiosha, can you help unpack some of these additions and why they’re something employers need to be mindful of this year?

Kiosha Dickey: Sure, Scott. So, each of these additions adds a layer of potential risk. Exemption status must align with California’s wage orders and federal FLSA test. If your HR system shows one status and your payroll system reflects another, or if you have borderline classifications, those inconsistencies become visible in a state filing. Employment type adds a new intermittent category; these are employees who work periodically or irregularly. And most HRIS setups don’t have a standardized definition for intermittent work. So, companies will need to document their decision framework to avoid inconsistent or ad hoc assignments.

And total annual weeks worked is especially tricky. And California counts any week in which the employee received paid time as hours work, worked hours or paid leave like vacation, sick leave or holidays. So, this differs from hours-based models and will require synchronization between timekeeping and PTO systems. So going back to what we talked about earlier, aligning your teams is so very important.

Scott Kelly: So, if a company’s tracking hours worked but keeps PTO records in a separate platform, weeks worked, I guess, is a potential undercounted data point?

Kiosha Dickey: Yes, and that’s the risk, Scott. The definition hinges on whether any paid time occurred in a week. If PTO isn’t captured at the week level or isn’t integrated into the feed for reporting, employers could misstate the total weeks worked, which would be visible to the CRD.

Scott Kelly: And there are penalty implications now? Am I hearing that right?

Jay Patton: That’s right. So, penalties were allowed in cases that the California Civil Rights Department brought or CRD, but in new legislation through California Senate Bill 464, which became law in October of ’25, if CRD requests damages, they become mandatory where an employer fails to file or fails to follow the filing requirements. And those damages are $100 per employee for the first infraction, $200 for the second and subsequent infraction. And that can apply to both the payroll, employee reports, and the labor contractor reports. So of course, this mandatory penalty raises the stakes to have complete data, to have it accurate, and to timely complete your filings.

In the last filing cycle, California looked more closely at entities withinside a parent to see if they had filed, and they’ve kicked out some more guidance. It appears they’ll kick out some more guidance about related entities being identified more carefully. It appears California’s, once again, stepping up its enforcement game on these payroll reports and looking more deeply at what’s filed to see if there are infractions. And then with these mandatory penalties, they have a way to recover even more and make this more painful for employers who don’t follow this carefully.

Another change from Senate Bill 464 for this year, beginning January 1, 2026, is the bill requires that demographic information used for the pay reporting be stored separately from personnel files. So, this has both process and privacy implications that employers really need to consider as they perform these reporting and as they gather this data.

Scott Kelly: Okay, goodness. That’s a lot to unpack there, but one thing that I keep hanging on is their labor contractor requirements. Can you shed any light on that, Jay, quickly?

Jay Patton: Sure, sure. The labor contractor reporting requirements include those three new data fields. As discussed earlier, they appear to be optional at this point for this cycle, but so not only, as Ki described, are they complicated and can provide traps for employers, but the labor contractor side of it makes it even more complicated because the employer referred to in California as a client employer who is required to file a labor contractor employee report, doesn’t have the data. They have to rely on the labor contractor to provide it to them. So, not only is it tricky if you have the data, but if you’re doing a game of telephone tag, as well as trying to get this complicated data together, the complexity increases.

So, the client employer asks the labor contractor employer or the labor contractor for these new fields of data, and there’s potential issues in it because CRD is looking for employee level data, including the weeks worked per client employer, which would necessarily involve paid time off. Well, what paid time off for your labor contractor employee is allocated to this client, and what time off is allocated to another client? So, you can see the complexity of these data things. And labor contractor reporting has always been harder, but these new fields are going to make it even more intense, and CRD seems to be putting more pressure to see, to ensure client employers are filing labor contractor reports. And also continuing to place pressure on client employers to identify labor contractors who do not provide data so that they can follow up on those issues, because that is a real tension in this reporting.

And so I mean, it’s a lot of different things that are coming together and especially in the paid time off, paid time off could be allocated to several employers, but could create conflicting reports for the same person.

Scott Kelly: Lots to think about there. As we’re looking to 2027, which is a year off, but it’ll come faster than we would probably all want it to. I read there’s a shift from the EEO-1’s 10 categories in California to SOC groups. Is that right?

Kiosha Dickey: Yes, and this is a major shift. So, California will be moving to 23 SOC major groups in 2027, which is a substantive remapping exercise for companies. Job category assignments influence pay equity comparisons and statistical analysis. So, employers will need to review job architectures, update job descriptions, and pilot the SOC mapping in 2026 so there are no surprises in 2027.

Scott Kelly: Okay. So, if you had a California specific action list, Kiosha, what would be on it?

Kiosha Dickey: I would say validate exemption markers across HR and payroll, define and document your intermittent criteria, integrate PTO and timekeeping to calculate weeks worked at the week level, build contractor data sharing protocols that capture your level weeks worked for those clients, and begin your SOC remapping in parallel with a privileged pay analysis to understand how these changes may affect equity signals in your filings.

Scott Kelly: Okay. Well, thank y’all both very much. We’ve covered a lot of ground here. I’d love to have y’all back on the podcast sometime soon. My takeaways are that federal filings remain the foundation, but the states are raising the bar with more granular data requests and some tighter tight lines. California is the big one to watch in 2026 with these expanded reporting fields and some penalties and the shift to the SOC codes in 2027, but Illinois and Massachusetts continue to enforce some unique requirements. And then we definitely all need to get ready for New York City’s pay data framework because that’s on the horizon.

Kiosha and Jay, thank you both for your insights. For listeners, the action items are straightforward. Looks like you need to confirm coverage, you would want to consider auditing your data in your systems, and don’t wait, especially if California is in your footprint. So, I’m Scott Kelly. This has been another episode of Defensible Decisions. Thanks for listening, and we’ll see you all next time.

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